Saudi Arabian Wealth Fund Close To $1 Billion Investment In Lucid

The Saudi Arabian sovereign wealth fund is in talks to invest $1 billion in electric vehicle startup Lucid Motors.

Sources tell Reuters that the Public Investment Fund of Saudi Arabia (PIF) has drawn up a term sheet which could see the fund invest more than $1 billion in Lucid and obtain majority ownership.

Any possible deal would see PIF initially invest $500 million while providing subsequent cash injections that are contingent on the automaker achieving unspecified production milestones.

Neither PIF of Lucid Motors are commenting on the possible deal but sources claim that the talks won’t necessarily result in a deal.

Lucid desperately needs money to make its goals a reality.

PIF’s interest in Lucid Motors exemplifies Saudi Arabia’s goal of diversifying its investment portfolio from oil sources.

Last week, Elon Musk revealed that the same Saudi Arabian sovereign wealth fund could bankroll a $72 billion move to take Tesla private. While Musk claimed that funding had been secured for such a deal, sources close to PIF assert that no commitments have been made. PIF did acquire just under 5 per cent in Tesla by purchasing shares in the open market.

Despite revealing its appeal Lucid Air in 2016, Lucid has yet to commence production of the vehicle. The company initially wanted to start building the Air in late 2018 but has failed to secure the necessary funds to make this happen.

One possible reason for Lucid’s difficulty in securing funding is the fact that Faraday Future chief executive, Jia Yueting, owns a 20 per cent share in the company. According to an unnamed source “[Jia] had always had a destructive strategy with Lucid. He doesn’t want them to succeed.”